This Artificial Intelligence (AI) Stock Trades at Just 2 Times Sales -- Is It Too Cheap to Ignore?

Core Viewpoint - Many AI stocks are trading at historically high valuations, making Intel's lower valuation stand out as a potential investment opportunity [1][2] Company Analysis - Intel's price-to-sales (P/S) ratio is 2.4, which is on the lower end of its 10-year range, indicating a potentially undervalued position in a market filled with high valuations [2] - The company has faced significant challenges in its foundry division, losing market share to competitors like Taiwan Semiconductor Manufacturing and Samsung [4][5] - Delays in executing its foundry roadmap have weakened Intel's credibility with major chip designers, leading to a reliance on competitors for advanced fabrication needs [5] - Intel's financial profile has suffered due to the costs associated with its turnaround strategy, impacting profit margins and free cash flow [6] Market Sentiment - Wall Street's skepticism is reflected in Intel's steep discount, despite its low P/S ratio, as investors question the company's ability to recover in a competitive landscape [8] - Recent developments, such as the U.S. government acquiring a 10% stake in Intel, signal confidence in the company's strategic importance for national security and supply chains [9] - Nvidia's $5 billion investment in Intel highlights the demand for advanced foundry capacity and suggests potential for Intel to regain market share [10] Investment Potential - The combination of government support and Nvidia's investment creates a narrative that Intel is too important to be overlooked, suggesting potential upside in its depressed valuation [12] - While Intel is unlikely to become a leading AI stock overnight, it remains one of the cheapest options in the semiconductor industry, appealing to contrarian investors [14] - Improvements in execution and the secular growth driven by AI could make Intel a rewarding investment opportunity, despite current challenges [14]